Which statement describes how licensing differs for RRGs compared to traditional insurers?

• A. RRGs must obtain charter in every nondomiciliary state
• B. RRGs are exempt from licensing
• C. RRGs must be licensed in each nondomiciliary state
• D. RRGs are required only to register with the regulator of the state and still comply with other laws and taxes

Answer: (D)

Under the LRRA framework, licensing for Risk Retention Groups is simpler across state lines: a group is chartered in its home state and does not obtain a full insurer license in every nondomiciliary state. Instead, it registers with the regulator in each state where it does business and must still follow that state's laws and pay applicable taxes. This approach keeps the regulatory burden lighter than full licensure, while maintaining accountability through registration and ongoing legal/tax compliance. The other statements aren’t accurate because RRGs are not required to charter in each nondomiciliary state, they are not wholly exempt from licensing, and they are not licensed in every state they operate in.